The challenge.
Tariff volatility: Uncertainty around US tariffs created pricing and margin pressure.
Supply chain disruption: Reliance on international manufacturing created exposure to container cost fluctuations, which ranged from $7,000 to $13,500 per shipment.
Foreign exchange (FX) risk: USD-denominated contracts exposed Harmony to CAD/USD volatility.
The approach.
The CFO Centre partnered with Harmony through a proactive, scenario-based planning process. Our collaborative approach ensured the leadership team had clear strategies to navigate uncertainty. Key steps included:
Financial Modelling: Building advanced Excel-based financial models with multiple scenarios to assess resilience under different FX exposures, supply chain situations, and pricing strategies.
Domestic Manufacturing: Partnering with Canadian-based manufacturers to assess opportunities for local production, aiming to reduce logistics and FX risks.
Strategic Planning: Initiated planning for new product lines within Harmony’s core expertise.
The CFO Centre’s solutions.
Financial Modelling: dynamic forecasting to anticipate multiple outcomes.
Hedging Strategies: reducing CAD/USD volatility to safeguard margins.
Repatriation of manufacturing: client successfully repatriated lift bed production, eliminating exchange and logistics issues.
New lines: launched online direct-to-consumer sales and expansion into related niche mattress markets for replacement RV and trucking mattresses, leveraging manufacturing in Canada.
Retail: initiated a warehouse-based retail outlet designed to capture both wholesale and retail margins while maintaining strong relationships with wholesale partners.
Financial reporting: evaluated new software to provide leadership with timely, decision-ready insights.
AI: evaluating the changing role of AI throughout the whole company.
Key outcomes.
Growth Pathways: Identified clear new pathways for growth and resilience.
Sales Growth: Achieved nine consecutive months of sales growth.
Retail Outlet: Launched a retail outlet at the warehouse, reducing the risk of investing in a standalone store.
Margin Improvement: Improved margins from retail sales, providing a financial cushion against FX fluctuations.
